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SEC set to approve best-interest rule; JPMorgan looks to avert credit card suits


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SEC set to approve best-interest rule; JPMorgan looks to avert credit card suits

The U.S. Securities and Exchange Commission is expected to approve today Regulation Best Interest, a three-part reform package would impose a "best-interest" standard of care for broker/dealers advising clients on where to invest their money, in addition to certain other requirements, Bloomberg News reports. The measure has faced some pushback from investor advocates and lawmakers since its introduction, as many critics say the proposal's foundation replicates existing regulations already established by the Financial Industry Regulatory Authority.

JPMorgan Chase & Co. is reintroducing a policy that forces its credit card users to use private arbitration to resolve disputes with the bank instead of going to court or initiating class-action litigation against the company, The New York Times reports. The policy change affects around 47 million accounts, including those for the company's Sapphire cards.

Wells Fargo & Co. revamped its commercial banking unit — which comprises of the company's business banking, government and institutional banking, and middle-market businesses — on a three-region model in an effort to simplify how it does business. The commercial banking unit will now comprise of the East region, to be led Kristin Lesher; the Central region, to be led by Laura Oberst; and the West region, to be led by John Manning.

U.S. District Judge John Koeltl sentenced Kam Wong, former president and CEO of Municipal CU, to 66 months in prison for stealing about $9.9 million from the New York-based credit union. Wong will also forfeit $9.9 million and pay restitution in the same amount to the credit union, as well as serve under three years of supervised release. In November 2018, Wong had pleaded guilty to one count of embezzlement.

Steamboat Springs, Colo.-based investment adviser Deer Park Road Management Co LP agreed to pay a $5 million penalty to settle the SEC's allegations that it failed to implement certain policies and procedures that resulted in securities in its flagship fund, STS Partners, being improperly valued. The company's chief investment officer, Scott Burg, will pay a $250,000 penalty.

Digital lender Social Finance Inc.'s Chief Marketing Officer Joanne Bradford, Chief Risk Officer Kevin Moss, and top capital markets executive Ashish Jain are leaving their positions in the following weeks, The Wall Street Journal reports. Bradford will be replaced by former Intuit Inc. executive Lauren Webb and former Zynga Inc. executive Jennifer Nuckles. Replacements for Jain, who is set to join short-term business lender C2FO, and Moss, who is retiring, have not yet been named, according to the report.

In other parts of the world

Asia Pacific: Bank of China begins India operations; Volt Bank eyes ASX listing

Europe: Aviva CFO resigns; Santander to cut UK jobs; BPER to raise up to €322M

Middle East & Africa: Attijariwafa Q1 profit up; rand falls as South Africa suffers economic slump

Now featured on S&P Global Market Intelligence

US banks with the highest price-to-estimated earnings ratios: As of May 31, U.S. banks and thrifts had a median price-to-estimated 2019 earnings multiple of 11.3x, down from 12.3x as of Feb. 28.

Support for CECL delay growing among US House Democrats: Democrats in the U.S. House are warming to the idea of delaying the current expected credit loss, or CECL, accounting standard from going into effect in 2020.

Undercapitalized US banks increase in Q1: The number of undercapitalized U.S. banks and thrifts increased in the first quarter, while the number of institutions designated by the Federal Deposit Insurance Corp. as "problem" banks continued to decline.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, Hang Seng increased 0.50% to 26,895.44, while the Nikkei 225 gained 1.80% to 20,776.10.

In Europe, around midday, the FTSE 100 went up 0.59% to 7,256.51, and the Euronext 100 climbed 0.77% to 1,037.96.

On the macro front

The U.S. ADP employment report, the U.S. services purchasing managers' index, the U.S. Institute for Supply Management non-manufacturing index, the U.S. Energy Information Administration petroleum status report and the U.S. Beige Book are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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